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Alpha Corp has been offered terms of 2/10, net 40 from one of its suppliers. Alpha can borrow from its bank at 30% per annum.

Alpha Corp has been offered terms of 2/10, net 40 from one of its suppliers. Alpha can borrow from its bank at 30% per annum. Calculate the effective rate of not taking the discount and determine whether the company should borrow from its bank and take the trade credit discount?

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